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Another product of the Chicago School of "voodoo" Economics.
Iceland pulled back from brink in $6bn rescue
Iceland is poised to announce a $6bn International Monetary Fund-led rescue package, backed with co-ordinated action from other central banks, to help stabilise its economy after its banking system collapsed this month.
People with knowledge of the talks between Iceland and the IMF said the international organisation was expected to contribute just in excess of $1bn (€750m, £580m), with central banks from the Nordic region and Japan contributing the rest of the money.
The proposed IMF package represents a breakthrough for Iceland in its attempts to stabilise its economy. The small, North Atlantic country was having difficulty obtaining any significant international backing before it secured this "seal of approval", according to negotiators.
What on earth happened to get Iceland and its banking sector into such a state?
It turns out that Iceland, despite its coalition governments and Nordic social values, became a poster child for neoconservative economic policies inspired by Milton Friedman during the past decade. Friedman himself visited Iceland in 1984 and participated in what was described as a "lively television debate" with leading Socialists. This inspired a generation of young conservatives who came to power through the Independence Party in 1991 and have run its government through different coalitions since then.
And just as an addendum, I heard John McCain say today that Obama’s tax policies would make "your" piece of the pie smaller while his tax policies would grow the pie bigger. Comments are welcome from both economic experts and cooks alike regarding the absurdity of that statement.
